Develop brief answers to each of the following questions: 1. Why does a decrease in receivable turnover

Question:

Develop brief answers to each of the following questions:

1. Why does a decrease in receivable turnover create the need for cash from operating activities?

2. Why would ratios that include one balance sheet account and one income statement account, such as receivable turnover or return on assets, be questionable if they come from quarterly or other interim financial reports?

3. Can you suggest a limitation of free cash flow in comparing one company to another?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...